In a move to clarify the issue of holiday protection, the Department for
Transport next week launches the first-ever Atol certificate spelling out
whether travellers’ trips are financially secure.

All Britons who book an Atol-protected holiday will now receive a yellow document, which explains how their trip is protected, and by whom.

It will also contain a unique reference number which will speed up the claims process.

The certificate must be issued to customers at the point of purchase – they will be handed the document when booking on the high street, or it will be sent to them by email or post if they book over the phone or online. Travel companies that issue the certificate without the necessary arrangements in place will be breaking the law.

The Atol scheme protects holidaymakers from losing their money, or being stranded abroad, in the event of a travel company going bust. All firms selling holiday packages involing flights must have an Atol, and they are required to pay into the Civil Aviation Authority’s financial guarantee scheme. In the event of a travel company failing, the CAA uses the funds to repatriate holidaymakers, or provide refunds for those yet to travel.

However, the rise in sales of holidays over the internet means that far fewer holidays are now Atol protected, and following the high-profile failures of recent years – such as those of XL Leisure and Flyglobespan – many passengers who thought they had booked a protected package ended up losing their money.

It is hoped that the new certificate will improve clarity, giving holidaymakers more peace of mind.

“It’s a change in the scheme that will make simple what currently can seem very complex: with the certificate consumers have protection, without it they do not,” said Dame Deirdre Hutton, chair of the CAA.

The introduction of the certificate follows changes to Atol regulations made earlier this year. The new rules, known by the travel industry as Flight Plus, mean that anyone who books a flight, as well as another travel service such as car hire and/or accommodation, through the same website, agent or tour operator, on the same day or “within a day either side of each other”, is covered.

Crucially, however, bookings for flights, plus another travel service, sold directly through an airline, are still not covered by Atol (although some airlines – such as Easyjet – offer financial protection through other means, if you book your flight and accommodation in one transaction). These holidays too may fall under the Atol scheme if the Civil Aviation Bill – currently being considered by the House of Lords – is passed next year.

Flight-only bookings also remain unprotected, unless your take out insurance that specifically covers airline failure, or book a flight that costs more than £100 using a credit card.

He said: “The introduction of an Atol certificate at last provides some much-needed clarity for holidaymakers concerned about the security of their travel arrangements. But there are still too many complications, exceptions and loopholes in the regulations which will mean that some travel companies, notably airlines, can continue to avoid the protection rules.”